What’s wrong with traditional annual performance reviews, and how can they be fixed?

Previously I wrote an article on the problems of traditional, annual performance appraisals. They are flawed because of the annual schedule, one-size-fits-all evaluation standards, simplistic 5-point scale, and the fact that criticism is tied to compensation.  While performance appraisals must be eradicated, rigorous performance systems—ones based on Feedforward Coaching, not annual feedback—are the secret to creating engaged, Superhuman Capital.

The entire idea of Feedforward Coaching is that it is a continuous process focused on future performance and career pathing—it’s not grading a year’s worth of past events; the manager serves as Coach, not Executioner.

One of the primary drivers of employee engagement is a sense of growth and development, and another is having a manager that cares about you. Feedforward Coaching pushes both of these hot-buttons. Indeed, a Bersin study (November 2011) showed that:

• Organizations, whose managers are highly effective at coaching, outperform their peers by a two-to-one ratio in productivity, retention and financial performance.

There are four keys to the Feedforward Coaching Model.

1)      Feedforward Coaching focuses on goals, not standards. The manager and direct-report work together to identify goals that are specific to the individual’s role, and aligned to corporate objectives. This is critical as it guarantees that workers will know “what is expected of me”, which is another key driver of engagement and performance. It also frames the conversation in a meaningful way. Are the goals on track or not? Why? What can the individual do to improve? What can others do to support?

2)      Feedforward Coaching includes career guidance. The manager helps the direct report identify career goals, and assists with career pathing. What are the skills, experiences, and contacts the individual needs to acquire to fulfill career goals? The manager helps the direct report close “the gap” by identifying mentors, assigning developmental opportunities, allowing for short-term job-rotations and allowing time and  money for training.

3)      Feedforward Coaching includes various data points, not just one manager’s opinion. In addition to the manager’s and individual’s perspective, feedback from peers can be gathered from formal 360-surveys, informal input from team members, or data gathered in peer-reward systems (e.g., Achievers.com or Salesforce Rypple). This changes the process from he-said she-said, to, “Let’s look at everyone’s input…”

4)      Feedforward Coaching takes place throughout the year, not arbitrarily annually. Feedforward is best given in the context of projects (i.e., goals) which of course have varying durations. Goals that would last a year or more should be broken down into smaller objectives so the feedback loop is more frequent. Career path discussions should happen as needed, but at least every six months.

The time has come to stop giving feedback and start giving feedforward. We must become leaders of people not just managers of tasks. Feedforward Coaching has the power to turn everyday workers into engaged workplace super heroes, whose discretionary effort will drive extraordinary business results.

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Kevin Kruse is a NY Times bestselling author and keynote speaker. Get more success and tips from his newsletter at kevinkruse.com and check out keynote video clips. His new book, Employee Engagement 2.0, teaches managers how to turn apathetic groups into emotionally committed teams.